Answer / sukavani

i had one more doubt?

wt is the defference bettwen capital & capital a|c

how?

Answer / ps_rks

charged word is not right for capital because any
organisation can not charge interest on capital. They can
charge interest only on drawing.

Answer / sukavani

Interest on Capital A/C Dr. 1500.00
To Capital A/C 1500.00


P&L appropriation a/c DR. 1500.00
To Interest on Capital a/c 1500.00
(Transfer to P&L a/c

no need to pass two entrys,if it required do it this also

Answer / sunaina

entry is:
Interest on capital a/c 1500
To capital a/c 1500

Interest on capital is an expense of the business , thats why it is debited to business. So, it will given on debit side of the Profit & Loss a/c.It is a financial expense of the business.

Answer / manoj kumar

Right Journal Entry are:-
1. Profit and Loss appropriation A/c Dr.
To Interest on Capital A/cs
(Interest paid on Capital only when Firm is partnership As
Per Partnership Act.)

2. Partner's Capital A/c Dr.
To Interest on Capital A/c
( Amount of Interest on Capital transferred to Partner's
Capital A/c.)

3. If Firm is not Partnership than no interest on capital
paid to firm's owner.

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